Correlation Between COACH and InMode

Can any of the company-specific risk be diversified away by investing in both COACH and InMode at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining COACH and InMode into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COACH INC 425 and InMode, you can compare the effects of market volatilities on COACH and InMode and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in COACH with a short position of InMode. Check out your portfolio center. Please also check ongoing floating volatility patterns of COACH and InMode.

Diversification Opportunities for COACH and InMode

-0.24

Correlation Coefficient

COACH  InMode

Very good diversification

The 3 months correlation between COACH and InMode is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding COACH INC 425 and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode and COACH is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on COACH INC 425 are associated (or correlated) with InMode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InMode has no effect on the direction of COACH i.e., COACH and InMode go up and down completely randomly.

Pair Corralation between COACH and InMode

Assuming the 90 days trading horizon COACH INC 425 is expected to under-perform the InMode. But the bond apears to be less risky and, when comparing its historical volatility, COACH INC 425 is 11.88 times less risky than InMode. The bond trades about -0.08 of its potential returns per unit of risk. The InMode is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,706  in InMode on September 16, 2024 and sell it today you would earn a total of  120.00  from holding InMode or generate 7.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

COACH INC 425  vs.  InMode

COACH INC 425

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COACH INC 425 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, COACH is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

InMode

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, InMode may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with COACH and InMode

The main advantage of trading using opposite COACH and InMode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COACH position performs unexpectedly, InMode can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in InMode will offset losses from the drop in InMode's long position.

The idea behind COACH INC 425 and InMode pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.